WASHINGTON (AP) – US homebuyers pulled back in July, as sales declined amid by a shortage of available properties and steadily rising prices.
Sales of existing homes fell 3.2 percent last month to a seasonally adjusted annual rate of 5.39 million, the National Association of Realtors said Wednesday. The decline marks a reversal from rising demand that pushed sales in June to their highest level since February 2007.
Fewer homes are coming onto the market, putting a cap on the sales growth enjoyed earlier this year thanks in part to a low mortgage rate and brightening job market. Rising demand for homes is a positive, but the dwindling supply of listings has fostered an imbalanced market defined by climbing prices.
The number of listings has tumbled 5.8 percent from a year ago to 2.13 million, meaning that would-be homebuyers are increasingly struggling to find attractive properties and may be delaying their purchases. Inventories have fallen on an annual basis for the past 14 months, an indication that many homeowners are still recovering financially from the housing bust that triggered the Great Recession almost a decade ago. Without sufficient equity in their current homes, many of these owners would be unable to generate a down payment for another home with the proceeds from a sale.
The decrease in listings has corresponded with home values rising at more than double the pace of average hourly earnings, making many homes less affordable for potential buyers.